non-profits receiving bonus/royalty payments

We have found in the tax code that royalty payments can be made directly to the non-profit without jeopardizing the tax exempt status.  Has anyone experience with receiving the bonus payment?  We have been told to start a C-corp to receive the bonus.  Does anyone know if this is necessary?  Thanks!

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Permalink Reply by Schnoozie on December 15, 2011 at 6:54am

I would love to know more about this!!

Where did you see this in the pa tax code?

I was going to call someone I know at Stillwagon and Magill in GC and ask them this very question this week. 

Permalink Reply by M. Magdalena on December 15, 2011 at 7:49am

Tax code Section 512(b) says:

"(b) Modifications  The modifications referred to in subsection (a) are the following:.....

      (2) There shall be excluded all royalties (including overiding royalties) whether measured by production or by gross or taxable income from the property, and all deductions directly connected with such income."

Also we know of a parish in Ohio with shallow pump-style wells that has been receiving royalties for 5 years from gas/oil wells on its property.  They receive the money right into the parish account.

However I have not been able to find anyone who has actually received a bonus payment into their tax exempt account.  Let me know if you find out anything else, please.

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